COMMISSIONER OF CENTRAL EXCISE Vs. COMFORT RUBBER INDUSTRIES

JUDGEMENT

(1.) REVENUE has filed this appeal against the reduction of penalty to Rs. 20,000/ - under Section 11AC on the firm and waiver of penalties on executive employee of the company under Rule 26 of Central Excise Rules.

(2.) THE facts of the case are that the respondents are SSI unit. They were having another firm in the name of M/s. Vikram Polypack which function from the same premises. A closure scrutiny of the record show that this firm was dummy firm. Statements of concerned employees and executives were recorded. Shri S.S. Shekhawat partner of the firm stated that they were issuing challan and excisable goods to M/s. Vikram Polypack which a fictitious firm he also admitted clearance of this firm clandestinely the said statement was corroborated by the other employee of the respondents i.e Miss Neeta D. Kapadia who confirmed that she had prepared the challan and other documents for clandestine removal of excisable goods on which appropriate duty was not paid. She further submitted that the documents were prepared under the instructions of Shri S.S. Shekhawat. Accordingly, it was held that goods sere clandestinely removed duty demand was confirmed but the lower appellate authority, considering the fact that the duty demand is paid before the issuance of show cause notice, a lenient view needs to be taken in adjudging the penalty. Aggrieved from the same, the revenue is before me.

(3.) ON the other hand, Shri L.V. Pai learned Consultant appeared on behalf of the respondent submitted that against the duty demand of Rs. 1,52,881/ -. The respondent had paid a sum of Rs. 3,32,706/ - in advance against the duty on the impugned goods clandestinely removed by the respondents. He submitted that in that event, the benefit of the provision of Section 11AC be given and the penalty is to be restricted to 25% of the penalty confirmed. To support this contention the case reliance on K.P. Pouches (P) Ltd. v. union of India : 2008 (228) E.L.T. 31 (Del.) With regard to the penalties and the executive, he submitted that when the firm has been penalized penalty, the penalty of the executive cannot be imposed. To support this contention he placed reliance on Commissioner of Customs (E.P.) v. Jupiter Exports, 2007 (213) E.L.T. 641 (Bom.) wherein it was held when the partnership firm was penalized, separate penalty cannot be imposed on the partners. He further submitted that the penalty on the employee is also not imposable as the employee is not going to be benefited by the firm and she was obeying the orders of her master and she has work on the instructions of the employer and she was having no intention and not having any monetary benefits.